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BioMérieux to Acquire BioFire Diagnostics for $450M Plus Debt

Awardee Story BioMérieux to Acquire BioFire Diagnostics for $450M Plus Debt
Date: Sep 13, 2013

Source: genomeweb.com ( click here to go to the source)

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) — French in vitro diagnostics firm BioMérieux said today that it has entered into an agreement to acquire BioFire Diagnostics for $450 million plus BioFire's net financial debt.

BioFire, which until August 2012 was known as Idaho Technology, is based in Salt Lake City, Utah, and markets the FilmArray molecular diagnostics system and associated syndromic infectious disease assay panels.

FilmArray is a fully automated molecular testing system that uses PCR and melt-curve analysis and simultaneously tests for multiple infectious agents in a single panel in about an hour.

BioFire's first commercial test, the FilmArray Respiratory Panel, received 510(k) clearance from the US Food and Drug Administration in May 2011 for the simultaneous detection of 15 respiratory viruses. A year later, the FDA granted 510(k) clearance for five additional pathogens. The Respiratory Panel also has CE marking and is commercially available in Europe.

In June, BioFire received FDA clearance for its second test, the FilmArray Blood Culture Identification panel, a 27-target assay that the company says can identify more than 100 sepsis-causing pathogens. That test also has CE marking.

BioFire is also currently developing test panels for gastrointestinal disease and meningitis. On the basis of ongoing R&D at BioFire, within the next three years FilmArray should be able to detect more than 70 agents responsible for respiratory, gastrointestinal, and blood infections, BioMérieux said.

BioMérieux also said that by further stimulating sales of FilmArray and expanding its menu, it intends to strengthen its position in infectious disease diagnostics — a core strategic focus that currently accounts for approximately 85 percent of clinical sales at the company. In particular, BioFire's products will benefit from BioMérieux's commercial network, particularly in North America and Europe, as well as its automated reagent production capabilities, which will optimize manufacturing costs, BioMérieux said.

Jean-Luc Belingard, chairman and CEO of BioMérieux, said in a statement that the acquisition "represents a decisive step for our company" and reinforces the firm's infectious disease franchise.

"FilmArray is the only system that makes it possible to detect disease-causing viruses and bacteria using a single reagent," said Belingard. "As such, it eliminates the borders between different technologies, simplifying the diagnosis of infectious diseases and delivering faster results for better patient care."

Based in Marcy l'Étoile and publicly traded on the NYSE Euronext Paris market, BioMérieux has 41 subsidiaries in more than 150 countries. In 2012, the company recorded revenues of €1.57 billion ($2.07 billion), with 87 percent of its sales outside of France.

BioFire currently has more than 500 employees and is expected to generate $70 million in sales for its fiscal year ending Sept. 30, 2013, including $40 million from FilmArray. BioFire also has a current operating loss before non-recurring items of $7 million due to R&D investments of about $18 million and expenditures related to the commercial launch of FilmArray.

In 2014, BioMérieux expects revenue recognized from BioFire to increase its sales by about $80 million on a full-year basis. The rapid development of BioFire and the FilmArray platform will subsequently act as a key growth driver for the company, with an expected increase of 100 to 200 basis points in BioMérieux's organic growth from 2015 to 2017, it said. In addition, the company expects BioFire's acquisition to have a dilutive effect on current operating income before non-recurring items through 2015.

Under the terms of the acquisition, BioMérieux will acquire full ownership of BioFire. Completion of the acquisition remains subject to usual closing conditions, in particular certain regulatory approvals, BioMérieux said.

The deal is expected to close by the end of the fiscal year or in early 2014 and consequently will not have a significant impact on sales and current operating income before non-recurring items in 2013. Acquisition costs will amount to €6 million to be recorded under non-recurring items.

BioMérieux said the acquisition will be funded through debt. In July, BioMérieux obtained an additional line of credit, and its current loan facilities now total €500 million with maturity dates of July 2014 (€150 million) and March 2017 (€350 million).

Of note, in 2010 BioMérieux established a partnership and took a €9 million stake in Swiss diagnostics firm Biocartis, with plans to co-develop assays on that company's molecular testing platform. BioMérieux said today that, along with Biocartis, it intends to review this partnership.

Separately, BioMérieux said today that its first-half 2013 revenues were up a fraction of 1 percent at €754 million from €750 million for the first six months of 2012.

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